The New York Times reports that Sen. Hillary Clinton (D-NY) “has decided to give up her Senate seat and accept the position of secretary of state.” According to MSNBC, it is “also expected Monday” that New Mexico Governor Bill Richardson will be named Commerce Secretary,” and New York Fed President Tim Geithner is expected to be announced as Treasury Secretary, “barring last minute changes.”
My very peaceful friend Mike Tidwell has a long post at Grist on how the Maryland State police shamefully spied on him. It updates the story I reported on earlier, “Maryland climate campaigners on terrorist list.”
Note to the police, the CIA, the Department of Homeland Security, and anyone else watching and listening — the threat to the health and well-being — the security — of Americans isn’t from those peacefully protesting climate inaction. It’s from the climate inaction, as even our intelligence community understands (see “The moving Fingar writes: Reduced Dominance Is Predicted for U.S“).
As our future Commander in Chief has said: “The science is beyond dispute… Delay is no longer an option. Denial is no longer an acceptable response.“
Earlier this week, America’s Health Insurance Plans (AHIP) and the BlueCross BlueShield Association issued statements agreeing to offer every applicant health insurance if all Americans purchased coverage. Insurance profits aside, a universal mandate makes sense. If the young and healthy avoid preventive care and only enter the health care system at the onset of sickness, they will require more expensive treatments or develop costly chronic diseases. To contain costs, better manage chronic diseases and improve preventive care, everyone has to be part of the system.
But while the insurance industry has shrewdly co-opted the rhetoric of universal coverage, they have not adopted the necessary affordability measures that progressives typically advocate for. For instance, while most progressives support community rating — everyone pays the same prices for coverage, regardless of health status — and a new health care exchange in which private plans are forced to compete with a public option, the insurance industry would be happy to see the government subsidize coverage for those who can’t afford it.
Since insurance companies will likely conflate universal coverage with affordable coverage and resist cost-containment measures that could undermine industry profits, progressives need to clarify their goals for reform and delineate the differences:
- Progressive argument: Replacing underwriting with a “community rating” system would set premiums based on age and location instead of the health status of the individual. This would bring down the cost of insurance for higher risk populations and guard against radical changes in premiums from year to year.
- Industry argument: Looking at the experience that states have had who have done guarantee issue, who have done community rating…they’ve had some prices increase, individuals have actually had a reduction in coverage in their market.
- Industry debunk: The problem with community rating is that if all health plans in an area don’t stick with it, it falls apart. If insurance companies to underwrite healthy applicants, the plans that are still community rating will be left with sicker populations and higher premiums. Community rating only works if underwriting is restricted and universal coverage is extended.
Competing Public Plan:
- Progressive argument: A competing public plan would use the administrative efficiencies of government-run health insurance plans, as well as the purchasing power of government to control costs. Insurers do not have (or are unwilling to use) the market power to counter the pricing power of many hospital systems or physician specialties.
- Industry argument: Where there’s a public option where they got to set the rules when competing with private companies, that would not achieve the type of goals on improving coverage and improving access, and making healthcare coverage more affordable.
- Industry debunk: Allowing private insurers to compete with a new public plan will lower costs and force companies to compete on quality and value instead of risk.
The U.S. Army recently released a photograph of four-star Gen. Ann Dunwoody, showing her in front of an American flag. However, it has now been revealed that the picture was digitally altered. In the original photo, Dunwoody was sitting at a desk:
The Army insists that it broke no guidelines by altering the picture, but the Associated Press has a “zero-tolerance policy of adding or subtracting actual content from an image” and has suspended use of Defense Department photos. Last month, the Army also doctored photos of two soldiers who had died in Iraq on Sept. 14. In the two pictures, only the names, ranks, faces, and coloration changed:
Dave Boaz offers links to a variety of Cato products on Alan Greenspan and the Greenspan legacy. What’s interesting is that there’s no consensus whatsoever. And yet, libertarianism is probably more prone to consensus-building than other ideologies. And of course people with progressive views disagree a lot about Greenspan’s monetary policies.
What’s telling here is that the Chairman of the Federal Reserve is the second most-important person in the American government. As Brad DeLong details in an excellent American Prospect article the Fed has incredibly sweeping powers over the economy. And those powers give the chairman leverage — and thus, in effect, more power — over other areas of policy. And yet knowing which broad ideological family someone subscribes to tells you very little about his likely views on monetary policy. But it’s a hugely important subject. Which I think tells us something about the bounded relevance of these ideological considerations.
Skeptics argue that the United States’ mounting budget deficits are a reason to put off public investments and reign in ambitious reforms. They’re wrong.
It is more imperative than ever to make targeted public investments that will yield high returns and lay the foundation for 21st century growth.
One set of savvy investments is in education, which recent research suggests would grow the economy and earn the government significant positive returns.
With investors around the world scrambling for a safe haven for their money, U.S. treasury bills are in high demand, meaning low yields for investors, but cheap money for the U.S. government.
At the same time, too many of America’s students are stuck in failing schools without quality teachers, test scores in key subject areas are woefully behind the rest of the world, huge gaps persist between students of different races and incomes, and more and more high schoolers are finding college out of reach.
This isn’t just a tragedy for young people and their families, it represents a huge missed opportunity.
High quality universal pre-school, improved efficiency, accountability and funding for grades K-12, and broader access to college, would address these festering educational problems and earn dividends on the taxpayer’s dime.
The fiscal benefits of these reforms aren’t abstract or aspirational. Conservative projections on the real fiscal rate of return on public educational investments are high: 10% for high quality preschool programs, 15% for innovative K-12 reforms like First Things First, and 10.3% for investments to encourage college access and graduation.
By contrast, the CBO’s projected real 10-year treasury bond yield (the cost of borrowing by the United States government) over the next decade is just 3.2% (after inflation).
The source of these potential returns isn’t complicated: better educated people are more productive, get sick less often, are less likely to require public assistance, commit fewer crimes, make more money, and pay more in taxes. Creating more of them is a good idea.
Of course, as a group of researchers at Columbia Teachers College write, “a society that provides fairer access to opportunities, that is more productive and with higher employment, and that has better health and less crime is a better society in itself. It is simply an added incentive that the attainment of such a society is also profoundly good economics.”
Read CAP’s education plans here.
Yesterday, stocks plunged for the second straight day, bringing “the Dow’s two-day drop to 873 points, or 10.6 percent, its worst two-day percentage loss since October 1987.” On Fox News last night, former Bush adviser Karl Rove tried to pin the blame for the drop on President-elect Barack Obama.
Though he admitted that there had been bad economic news yesterday, Rove questioned “how much of it is the news of the day.” “I mean, how much of it is that, and how much of it is the market saying, You know what? The economy is not in a good place and we’re looking at the future, and how much confidence should we have in the team that’s coming to make the economy better any time soon?,” said Rove.
He then suggested that the problem was that Obama hadn’t named his Treasury Secretary yet:
ROVE: Well, I got to tell you, I’m a little bit surprised. If the number one issue facing the country is the economy, then it strikes me the new administration, the president-elect, would be putting a lot of emphasis on getting a Treasury secretary and an economic team in place in order to signal to the country what he’s going to do.
But instead, we’ve seen a leak about the secretary of state. We’ve seen pretty serious rumors about who’s going to be attorney general, pretty serious rumors about who’s going to be head of HHS, Health and Human Services, who’s going to be Homeland Security counsel — Homeland Security department chief.
Though some economic analysts believe it would be helpful for Obama to name his econ team, it is laughable for Rove to blame the market’s problems on Obama. Indeed, the market is much more likely reacting to yesterday’s “grim economic data,” which included “a 16-year high in weekly unemployment claims and the failure of Congress to reach a deal to help U.S. automakers.”
Rove says the market is “trying to look four months, six months, a year in advance.” That may be so, but anyone hedging their bets is probably much more concerned about the economic outlook released by the Fed on Wednesday — warning “that a recession believed already to be underway could last until mid-2009 or later” — than who Obama picks to head the Treasury Department.
Transcript: Read more
The Wonk Room notes Hank Paulson’s disturbing habit of proclaiming that everything is fine just before some new piece of terrible news hits. Just last week he said “the banking system has been stabilized.” Now Citigroup is on the verge of collapse.
And yet for some reason some keep feeling that Paulson is worthy of things like gushing Washington Post writeups. It’s frightening to consider the implications of the fact that the Secretary of Treasury doesn’t seem to know what he’s doing. But just because it’s frightening doesn’t mean we need to be in denial about it.
Speaking of smoking, the confidence in the economy of America’s elite is sure to be shattered by the news that Out of Town News, the newstand smack in the middle of Harvard Square, is shutting down. The internet had basically made its core business model obsolete some time ago. The general idea, as witnessed by the name, was that you could buy all kinds of “out of town” publications there, thus serving the news needs of the university’s geographically diverse community. But people still buy other stuff — I used to buy cigarettes there, and sometimes Diet Coke (but soda’s cheaper at the university vending machine), but I think cigarette retailing is a declining industry as well.
Note that the closing of Out of Town News is part of the dystopian vision of The Handmaid’s Tale.
Spencer Ackerman has a great article on the concern that a lot of Obama-minded people have about the prospect of Hillary Clinton at Foggy Bottom — they worry about what that means for subcabinet positions:
Some progressive Obama supporters think the arrival of Clinton at the State Dept. will mean they’ll be frozen out. That would have implications for their advancement in subsequent Democratic administrations.
“Basically, you have all of these young, next-generation and mid-career people who took a chance on Obama” during the primaries, said one Democratic foreign-policy expert included in that cohort. “They were many times the ones who were courageous enough to stand up early against Iraq, which is why many of them supported Obama in the first place. And many of them would likely get shut out of the mid-career and assistant-secretary type jobs that you need, so that they can one day be the top people running a future Democratic administration.”
In the foreign-policy bureaucracy, these middle-tier jobs — assistant secretary and principal-deputy-assistant and deputy-assistant — are stepping stones to bigger, more important jobs, because they’re where much of the actual policy-making is hashed out. Those positions flesh out strategic decisions made by the president and cabinet secretaries; implement those policies; and use their expertise to both inform decisions and propose targeted or specific solutions to particular crises.
To add some further context here, back during the primaries there was tons of talk of the most senior “foreign policy community” types in Clinton’s orbit “warning” younger national security professionals that there would be big-time payback if they backed Obama and he wound up losing. At the same time, while on the top level Clinton tended to attract a diverse group of people with personal ties to her, at the bottom level you tended to get a lot of very risk-averse careerists — the sort of people who just sign on with the frontrunner and don’t really have any passion or vision. I think that sort of thing wound up ill-serving Clinton during the campaign, when one advantage Obama had was a staff full of genuinely passionate supporters, and I doubt it’s a dynamic she deliberately wants to foster. But you could have a situation where Secretary of State Clinton wants to bring in as key subordinates loyalists who she’s comfortable with, and then those loyalists want to go about fulfilling their threat of punishing Obama supporters by locking them out.
Suffice it to say, that would be a bad thing.